Stephen Mansfield, PhD, FACHE, president and CEO of Methodist Health System in Dallas, discusses his outlook on healthcare for the next several years, including the need to improve access, the process of integrating independent physicians and the American expectations that are crippling hospitals.
Q: What do you see as the top challenges for your hospital over the next few years?

Stephen Mansfield: I think the big challenge that I see is continuing to improve quality while taking cost out of the system and trying to maintain access. To me, that's the ultimate conundrum for healthcare, because historically, the thought has been that you could do any two of those but not all three. In other words, you could improve quality and lower cost, but the only way to do it was to deny access or have rationing. Or you could lower cost and have access, but in that scenario, the quality suffers. But that's the pressure we're under — to try and deliver on all three of those metrics: better quality, better value and sufficient access.

I would also say hospitals are wrestling with how they best align their resources in order to perform well under healthcare reform metrics. That can translate to different imperatives for different people, depending on where you are. If you're behind the curve on IT, that means committing a lot of capital to information technology over the next few years. It may mean growing the size and scale of your physician enterprise, if you need that in your market and can't figure out how to get your ACO strategy to work without it. For us, we are in Texas, and I think because commercial reimbursement for physicians has been a little higher here than it is in some parts of the country, we have a lot of physicians who are still independent and in very small groups. We have very few large groups in primary care or specialties. [This requires] figuring out how you integrate with those independent physicians in a meaningful way to increase quality and decrease cost. It's not going to be the same in every market, or even within one market. We've got to find a way to align with independent physicians because in Dallas, 85-90 percent of physicians are unaffiliated with an IPA or health system.

Q: That number is surprisingly high, considering all the talk about hospital employment. Are you promoting hospital employment to those independent physicians, or do you think it's more practical to assume they will stay independent?

SM: We've shifted our focus recently. My position is that the independent physician model is one of the greatest entrepreneurial success stories in American history. As long as physicians can make that work for them, I like that. I think it's good for patient care and good for them in many respects. We're saying, "We want you to remain independent, but if you get to a point where you just can't anymore, we can provide MSO services that take the headache out of running an office practice away but still leaves you independent. We can also do an employment arrangement."

We've shifted to a belief that we need more scale in our physician enterprise. To effectively accomplish the ACO project well and the medical home project well, we are more proactively approaching physicians to ask, "Would you like us to talk to you about what employment or alignment might look like?" We don't want to wake up some morning and read that a competitor has aligned with a physician group we've had a long-standing relationship with, and when we talk to them, they say, "You never talked to me." We're shifting to educating physicians about the model and encouraging primary care physicians to consider it.

Q: Assuming the majority of that 90 percent want to remain independent, how do you accomplish integration without employment?

SM: There are two groups that are not employed that are critical to the hospital, and I think you have to approach those differently. There's the group that are not employed but are in the hospital every day, and they're very involved with the hospital. Those are largely your specialists — your neurosurgeons, cardiologists, gastroenterologists, etc., who still do a lot of work at the hospital.

[First, let's discuss] the harder group. With the advent of hospitalists, more and more primary care physicians, family practice and pediatrics and internal medicine physicians just don't come to the hospital anymore. Many of them don't even have privileges at the hospital anymore. They don't attend your medical staff meetings, aren't part of your committee structure and communicating with them requires a whole extra level of effort. Each hospital [in the Methodist Health System] has a program whereby they call on their primary care physicians periodically just to make sure we are providing them with what they need. That takes a lot of time. It's kind of guerilla tactics, but it's a growing group that no longer has to have a practice at the hospital in order to have a viable outpatient practice and communicating with them requires a different approach.

Going back to specialists that do work at the hospital, we're in the early stages of working with them on a clinical integration program that would allow us to share resources with them, even though they're independent, around our success in implementing best practices and care pathways. Those are things that take cost out of the system and elevate quality. If we meet both of those metrics, there's a financial incentive for doing so for those physicians. The biggest changes in trying to put together those structures in an intuitive way is the healthcare laws that have not been rolled back to be integrated into ACO models. Q: You mentioned earlier that traditionally, hospitals have been unable to lower cost, improve quality and improve access simultaneously. Which do you think most frequently suffers, and how could the parts work together instead of blocking each other?

SM: I think we're all coming to an acknowledgment that the correlation between higher quality outcomes and lower cost is there. I don't think you can cut your way to higher quality, but I think you can improve quality in a way that reduces cost. We're seeing that in our own practice, as we standardize practices and take variation out of our system that has a cost variation associated with it. High-quality care can also be lower-cost care. The two are very tightly aligned.

The tough one for us is the question of access. With Medicaid cuts and more and more people without insurance, we're ending up with a lot of the access to the healthcare system being in the most expensive portal of entry: the emergency room. Unfortunately, we have an unfunded mandate that we need America to deal with. If America believes every American deserves access to care — and I do — we need America to pay for it, not expect hospitals to pay for it. Hospitals are being burdened with fulfilling America's conscience around provision of healthcare services, in the way that care is mandated but not reimbursed.

It's about to get increasingly worse as states across the union are looking at dramatic reductions in Medicaid reimbursement. Many physicians won't accept Medicaid anymore. They don't have to treat emergencies, and people who are very sick will flood ERs when they could have been treated much more effectively in a primary care setting. It's a tough issue. It would be like if we said to the grocery store business, "In America, it's unacceptable that a human being could starve to death. Grocery stores, you are obligated to provide food to anyone who shows up at your place and says they are hungry. By the way, no one is going to pay you for that." We're expected to provide healthcare to everyone who shows up, but we have no funding for people who don't have insurance.

Q: What do you do within Methodist to increase access to patients who would otherwise flood the emergency room?

SM: We have a congregational nursing program which has a very high return on investment.We carry the full cost of that the program, providing nurses who work in partnership with churches in underserved areas on preventative health and education. In addition, two of our urban hospitals operate active outpatient-teaching clinics staffed by residents and supervised by attending physicians. The teaching clinics are a vital community resource providing greater access to preventative and ambulatory health care services for the growing number of un-or-under-insured, poor and indigent residents. Both clinics offer innovative programs such as MedAssist, which provides free prescription medications to patients while social workers negotiate with pharmaceutical companies for long-term assistance. Without proper medication, patients with chronic conditions — like diabetes, high blood pressure and heart disease — can develop serious, sometimes fatal medical problems. The only option for many patients is to seek treatment at the nearest emergency room once their conditions have deteriorated. MedAssist aims to stop the cycle by connecting patients with long-term drug-assistance plans, bridging the gap until those plans begin, and managing patients' medical conditions over time.

We recently opened a QuickCare Clinic at our busiest ER to provide a non-emergency care alternative to the ER with extended and weekend hours when patients' primary care physicians' offices are closed or unable to offer a same-day appointment. If a patient receives services at our clinic and does not have a primary care physician, we assist them in finding a medical home.

Despite our progress, the need is so much greater for access. Even though we're able to support some primary care physicians financially, they run into problems with complexity in patients, and then they can't find a specialist who will take the patient without any kind of remuneration. You go to any emergency room in any safety net hospital in America, and Americans would be appalled and discouraged by the breakdown in our healthcare system.

Q: Quality is put at risk if physicians are overwhelmed by patient load. With the addition of 32 million Americans to the ranks of health insurance, how do you maintain quality when physician and hospital time is increasingly limited?

SM: It puts pressure on us, there's no question. A lot of quality is related to how good your systems and processes are, so you flow patients the same way every time and do the same thing every time. To the extent you've established those best practices and followed those protocols, it's less likely you'll be overwhelmed.Q: How do you ensure your independent physicians know about and are following those standardized practices?

SM: We try to do it through our independent medical staff structure. We're fortunate that we have great doctors and really outstanding leadership on our medical staff. That's why I'm a proponent of clinical integration: We've got to figure out a way to compensate physicians for time they spend out of the office or surgical practice working with you to implement and ensure there's compliance with best practice protocols. We've done that through voluntary effort of medical staff up to this point. If we're going to take that to full implementation, we've got to have a structure that compensates them.

It [also] has to be physician-led. I think the health system can do a lot to manage the menial aspects of that work, but the thought leadership has really got to come from your medical staff. First they must convince themselves that there is a best practice, and then you begin systematically taking variation from that best practice out of your system. It's a little harder if you don't have your physicians in some kind of clinical integration.

Q: Where is your hospital in terms of EHR and IT implementation?

SM: Well, I've only been with Methodist for four and a half years, and when I arrived, they were ahead of the curve nationally in terms of implementation of EHR. We've employed a systematic approach, and in fact, we're rolling out computerized physician order entry next week in our emergency rooms. The challenge with that is there's a massive learning curve. Because we've been on EHR inside the hospital for some time, we're being impacted now [as we implement outside the hospital]. As we're automating office practice for physicians in our employed network as well as independent physicians, they are saying it affects productivity negatively. Physicians may be able to see 90 percent of the patients they saw before. We need more productivity, not less.

We're seeing the efficiency of the billing process is better, and you do take cost out of the system through EHR just by eliminating charts [and] the person who spends their time trying to find charts. There is a savings there, but in actual physician time, it pinches the cost savings a lot through the learning curve. We're debating on when you start to use scribes to help physicians with that component of their office. The challenge is that every physician's office has some nuances of difference in the ways they do their paperwork. When you take them and put them on an automated system, it allows for little variation in the way it's used. You have to change the way you think and the way you document and the way you code to its methodology and algorithms. It just takes some time. Clearly the use of IT in healthcare is a must, but getting from here to there is very expensive from a capital standpoint and very impactful to physician productivity. On the front end, you have to acknowledge it will have an impact and build systems for physicians during that transition.

Q: We've talked a lot about capital and spending — it seems that many initiatives in healthcare at the moment are draining hospital profits. How do you cut costs to offset those expenses?

SM: Methodist is a health system that has a pretty good cost structure, and we have to because we're in an area with more uninsured patients than most health systems have and have been forced to run lean to compensate. For years, it's been a cultural element of Methodist that we'll try and do more with less than most systems do. We have a management group that manages resources extremely well, but you can only do so much with that. There has to be something else, and I think the real opportunity is how you align and integrate with medical staff so they can help you intuitively reduce cost. The Institute of Medicine believes that 30 percent of what is spent in a hospital adds no additional clinical value to the patient. You have to get at that through integrating with medical staff and ensuring that everything they do on the care pathway is adding clinical value.

I also really believe that for hospitals to get at their cost structure, they have to create systems that identify and treat chronically ill patients differently from acutely ill patients. Our system currently treats the chronically and acutely ill basically the same and because of that, the cost associated with treating chronically ill patients has escalated across the healthcare system. Chronically ill patients require much more longitudinal coordination, and most chronically ill patients end up in the hospital because they are not managed well outside the hospital. That has to change, because 75 percent of our cost is related to the treatment of patients with 5-6 chronic conditions.

[Methodist] buys healthcare for employees to the tune of $40 million a year, and we found that within our own employee group, 12 percent of our employees and dependents are driving 88 percent of our cost. We're trying to get those individuals in a different care setting and on a benefit plan that works for them. Beginning with our own employees, we're doing what has to happen at a macro level by treating chronically ill patients differently than those who have acute illness.

Q: Any last thoughts before we wrap up?SM: At the end of the day, in my view, healthcare reform is largely about insurance reform and secondarily about delivery reform. We currently treat patients who are already ill and we're trying to figure out the best way to treat someone who's ill. That has to shift to a prevention/wellness focus. In my view, President Obama … missed an opportunity during the healthcare reform debate to say, "We are unhealthy as a nation, and we're doing it to ourselves through diet and lack of exercise. We're going to be the healthiest health system on the globe by 2020 and here is how we are going to get there."

It's important to create some kind of momentum around personal accountability for health. If Methodist Health System is responsible for the health of the population around us, and the population has no accountability for their health, we will not be successful. We have to shift our focus to a focus that's further upstream. That probably starts with children: We are producing a generation of obese kids with the highest incidence of diabetes we've ever had. It's like our ancestors used to say: "An ounce of prevention is worth a pound of cure." The cost of prevention is miniscule; the cost of treatment is enormous. We've got to get Americans focused on individual accountability of health.